The Four-day Week – Key Considerations for Employers

Posted in : HR Updates on 8 November 2021
Hugh McPoland
Clarendon Executive
Issues covered: HR Updates; Four-day week; Atypical workers; Pay and Conditions of Employment; Policies and Procedure

It has now become a little trite to say the Pandemic has changed us all.  Many of us have realised that there are more important things than work. However, work is still essential as it usually funds our lifestyles and, in many ways, keeps us included in broader societal experiences which comes from mixing with people.  As HR professionals, we are looking at ways to respond with new initiatives on “hybrid working” and reconsidering the extent of part-time working, flexible working hours and even a four-day week or the three-day weekend.

Many of these ideas are seen as niche and applicable to particular sectors that can launch multiple channels blending human and technological solutions to customers’ needs. But sometimes, an idea comes which helps change the way we do business. The Production line was at one-time revolutionary, then became the standard process until Volvo changed it with their team-based production process. Is now the time for a revolution in the organisation of how we organise work?

For some time now, employers have been challenged about the rigidity of a standard working week, be it 40 hours or 37.5 hours worked from Monday to Friday or shifts of a particular duration.  Many of these arrangements originate from the trial and error of employers running factories and industrial processes to optimise the cost profiles of products or services delivered to customers. But modern workplaces and services are increasingly digital with multiple service channels available to customers, so is a 5-day working week for humans still necessary?

Trade unionists rightly note that every significant change in the terms and conditions of workers have been met with scepticism by major employers ranging from outright indignation and prophecies of doom if such changes such as the Minimum Wage, right to part-time working, career breaks, parental leave, paternity and maternity leave and other initiatives were to be fully deployed. They all happened, and the world is a better place for them.

But did you know the Office of National Statistics reported that the seasonally adjusted average weekly hours for full-time workers reduced from 38.1 in 1992 to 36.1 in August 2021, a 5.2% reduction? By my calculations, that is already approximately a 4.5-day week.

However, most of the work I have seen about the four-day week has a working assumption of a 40-hour week, which is relatively easily divisible over 4 or 5 days. I think we also need to be clear as to whether what we are really talking about is it about compressing working hours or reducing the hours of work on the same pay to a number that traditionally would be 32 hours.

Either way, we need to ensure that we know the implications. We have all seen the results from studies in Sweden, New Zealand, and the USA.  There are clear trends in the reporting of the various pilots about the “four-day week” and other ways of reducing the working week with employees recording a better work-life balance, reduced stress levels and higher levels of engagement for the company. It almost seems too good to be true, and why would you not do it?

Utah State as an employer, experimented with a four-day week (three-day weekend) in 2007, although that pilot ended when residents complained that they could not get their business done on a Friday when the public services were closed.

So, is the four-day week the right solution for all businesses? I am not convinced that it can apply to all sectors, although it can clearly work in office-based environments where technology can help support companies deal with their customer base over the new three-day weekend.

It appears to me that a successful introduction of the four-day working week needs companies to have:

A Strong Sense Of Strategic Competitive Reason

Is it about getting talent in a highly competitive environment? Is it solely because someone else is doing it which is never a good reason? Eye-watering clarity on the reasons and the metrics for success are essential. Is it to improve engagement and motivation or to improve employees’ wellbeing?  Have a sense of what you are trying to do to make the most robust possible business case.

Clarity About the Performance Objectives

Many managers I know will say I don’t mind a four-day week if all the work gets done. The reported productivity increases suggest that the work will get done as the same work gets done in 4 days rather than five. Still, my sceptical mind just wonders has that really helped the company increase its corporate productivity. Is it fair to assume in these reported pilots that the current productivity levels are competitive? More importantly, is it fair to ask people to do the same amount of work in four days that they were previously expected to do in five? If so, what does that say about your value system and is that ok? It strikes me that culturally there may be a performance issue. I know productivity falls over time in work unless driven by automated processes, but that fall in productivity may also happen in a four-day week environment.

A Cultural Fit

If the company still has a Wall Street “greed is good type culture” where presenteeism gets you promoted, then a four-day week is probably not for you, but if the company is switched on to the need to achieve a good work-life balance, employee wellbeing and engagement for the long term then the four-day week may be the next innovation for you.

Traditionalists and Current Part-time Staff

Depending on the strategic reason for introducing the four-day week, we also need to consider the implications for the people who may be happy to work five days a week as it is part of their internal psyche or rely on work as an outlet for socialisation and a reason to get up in the morning. As noted above, ONS statistics suggest many full-timers already work less than 40 hours per week, and their pay is structured on that basis. Care will need to be taken to ensure pay strategies don’t become skewed if the rest of the workforce suddenly switch to a four-day week on the same salary (effectively a significant pay increase). In contrast, those who are already on a reduced working week may not see an increase at all, which may, at a minimum, create some industrial relations issues and, at worse, create an equal pay problem. Early consideration of the impact on the salary structure will be essential to ensure a smooth transition to the new working paradigm.

Continue To Look After the Customers

While a company may go for a four-day week, there may be a need to ensure a presence in work for five if not seven days be it in hybrid or virtual form, to ensure that customers who have not taken the bold step to move forward on a four-day week are still looked after.  Company owners will need to ensure that the long-term benefits for the employees (and even the climate) as per the Utah experiment are not lost because customers transition to others who develop an ability to attract talent to deliver exceptional customer service without having a four-day week.

Whatever the outcome of the consideration, make sure everyone in the company knows about it. A pilot study may be appropriate to test its relevance and fit for your company but also try and ensure that the participants are also trained in new time and productivity management skills, so we don’t end up looking back at a lost opportunity to make life better for at least some people. 

This article is correct at 08/11/2021

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Hugh McPoland
Clarendon Executive

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